A certain member here who claims to have an MBA thinks stocks are always better than real estate.
That is simply not true. While stocks can sometimes give you a higher return, real estate is a solid investment. You can buy the land and any buildings on it and charge rent. That can provide more return than some stocks.
You are 100% correct. The poster in question takes a very simplistic look at the comparison and only looks at capital appreciation.
To be fair it isn't easy to do a more robust comparison because much of the data needed isn't readily available.
Anyone who claims to be knowledgeable in finance knows that there is much more to an investment than capital appreciation. In fact the real reason people invested in stocks was to share in the profits aka dividends.
I would love to debate the resident Spicoli on this topic but I have realized I can expect nothing more engaging than his stock answers. He is very much like Desh in that regard. They sing from the same hymnal and never deviate.
For example here are few things that ole Topper is afraid to discuss or is just ignorant on
1) with real estate I can buy a $500,000 property with 20% down if I go conventional. I have even bought properties for ZERO down through owner financing
2) banks will lend you money to buy real estate, not so much for stocks. That alone should tell you something
3) real estate is inflation protected as I can (and do) raise rents every year. Inflation eats away at stock returns
4) even in a real estate downturn I am still collecting rents. In fact during economic downturns many more people turn to renting
5) despite Toppers claims of taking advantage of "tax shelters", I get REAL tax benefits that he can never get with stocks. Since I am run as an LLC working out of my home just about everything is an expense. I don't pay for my cell phone, Internet, gasoline, etc. Since my wife works for the business, we can expense dinners all we have to do is talk about the business for 20 seconds and it is all legit. We even keep notes in case the IRS comes knocking. We even write off vacations as business retreats. All legal. We write off season tickets to sporting events. All legal.
Now when you add all of this up, you get some tremendous advantages with real estate that you will never get with stocks
Now don't get me wrong. Real estate is hard. I made a lot of mistakes in the beginning. But I learned from them and I have amassed a nice nest egg for me and my family. I work a few hours a week and do what I want when I want. I am no Warren Buffett but I consider myself financially secure.
Now personally I have never gotten into the "stocks are better than real estate" argument. I believe that both are legitimate means of amassing wealth. Topspin however is very closed minded.
You see Topspin is nothing more than a bookkeeper who managed to land a job at a big oil company during the time when companies were very paternalistic. He went along with the program and eventually retired with a lump sum retirement from their pension. He essentially hit the lottery. Now I am not knocking it. I am merely explaining his psychology. It doesn't sound so sexy when he tells people on a message board that he was just a bookkeeper so he creates the MBA persona and tries to bill himself as some sort of Warren Buffett to make himself sound bigger than he is.
